Consultancy Report 1% q 57 r End of Projeet Report J Lf- West Bank/Guza: Cooperative Development Project Contract Number: ANE-0159-GSS-6020-00 Prepared by: Rex Schultz Prepared for: Agricultural Cooperative Development International 50 F Street, NW, Suite 900 Washington, DC 201 Phone: 2021638-466 1 Fax: 2021626-8726 January 1, 1986 - August 31, 1992 WEST BANK AND GAZA COOPERATIVE DEVELOPMENT PROJECT (CDP) SPECIFIC SUPPORT GRANT NO. ANE-0159-GSS-6020-00 JANUARY 1,1986 - AUGUST 31,1992 Submi#ed to: U.S. Agency for International Development Near East/Middle East Submi#ed by: Agricultural Cooperative Development International 50 F Street, NW, Suite 900 Washington, DC 20001 Phone: 202-638-4661 I Fax: 202-626-8726 ABBREVIATIONS ACDI Agricultural Cooperative Development International ACU Agricultural Cooperative Union ADCC Arab Development and Credit Company AGREXCO A@cultural Export Company (of Israel) A.I.D. Agency for International Development AMIC Agricultural Marketing Information Committee AMIS Agricultural Marketing Information System ANERA American Near East Refugee Aid CDP Cooperative Development Project CHF Cooperative Housing Foundation CIVAD Israel Civil Administration EC European Community JCO Jordanian Cooperative Oqpkation NCBA National Cooperative Business Association NRECA National Rud Electric Cooperative Association TA Technical Assistance mc Arab Technical Development Corporation UEC Union of Electric Cooperatives VEC Village Electric Cooperative VOCA Volunteers in Overseas Cooperative Assistance WBG West Bank and Gaza WID Women in Development WOCCU World Council of CdtUnions I. INTRODUCTION A. Background The Cooperative Development Project (CDP) began in 1986 as a program of the U.S. cooperative development organizations to assist Palestinian cooperatives in the West Bank and Gaza (WBG) to increase their economic status and improve the standard of living of the Palestinians. CDP's purpose was to strengthen the capability of cooperatives to operate as effective and efficient businesses and provide services to their members. The project was carried out under the auspices of the Washington-based Cooperative Resources Committee' with Agricultural Cooperative Development International (ACDI) acting as the prime A.I.D. grantee. For a period of more than 20 years there had been no cooperative training undertaken in the West Bank. With the end of the Arab-Israeli war in 1967, the Jordanian Cooperative Organization (JCO), which originally provided authority, support and surveillance over West Bank cooperatives, was compelled to curtail much of its support and mining in the West Bank. During the fmt two years, CDP customized its training to meet the bmad needs of the wider cooperative community in the West Bank. In ~spondingto the needs of the cooperative movement, CDP offered a wide variety of trainiag courses and technical assistance. An evaluation2 of cooperative sector projects was made in the fall of 1988 and ,- ,- many of the recommendations contained in it were incorporated into the extension project, which was prepated in January 1989, and noteworthy was the recommendation to focus training on a small number of cooperatives. The major elements that were included in the new proposal: The following U.S. organizations comprised this joint endeavor: the National Rural Electric Cooperative Association (NRECA); Agricultural Cooperative Development International (ACDI); the Cooperative Housing Foundation (0;the National Cooperative Business Association (NCBA); the World Council of Credit Unions (WOCCU); and the Volunteers in Overseas Cooperative Assistance (VOCA). 2 ve Sector how, April 10, 1989, TvT Associates, B.H. Kratka, Gene P. Miller and David E. van Tijn. A new agricultural cooperative rtmketing program for expanding existing markets in the WBG and developing new markets in EC; A credit component for pduction credit, seasonal loans, etc.; A new Village Electric Cooperative (VEC) project to upgrade and expand rural networks in the south with $437,000 set aside for credit and grants; An extension of the technical assistance and training program with a focus on key model and core cooperatives; and New initiatives emphasizing women-in-development, the development of a cooperative publications and resource center, extension of the program to Gaza, and a new Farmer-to-Farmer program. B. Project Objectives The overall goal of CDP was to increase the income and well-being of members and families of Palestinian cooperatives by improving and expanding services of WBG cooperatives. CDP sought to accomplish this goal by: 1. Strengthening WBG cooperative enterprises' capability to operate as effective and efficient businesses; 2. Improving the ability of WBG cooperatives to market agricultural products; and 3. Improving WBG cooperatives access to credit. In May 1991, CDP further crystalked its objectives and developed this mission statement: CDP is a regponsive development organization whose mission is to empower institutions which show promise of operating with sound business practices. Guided by principles of cooperation, CDP fmuses on the delivery of quality management and technical skills training and comprehensive human resource development. CDP's development philosophy targeted the "grass mots level," building the institutional capacity of WBG primary cooperatives. To implement this approach, CDP focused on a select pupof cooperatives which, with CDP interventions, would form a nucleus of well managed cooperatives that other WBG cooperatives could replicate. It should be noted here that the stmtegy to focus on a small number of cooperatives grew out of CDP's own experience as well as having been a key recommendation in the TVT evaluation mentioned above. C. Project Assumptions In this final report it is important to review the assumptions that were included in the fmal revision of the program proposal submitted in February 1989, and as set forth in the original logframe. Parts 1 and 2 of this subsection review these assumptions in the context of what took place over the life of the project. 1. a1 assumptiong The goal assumptions in the logframe included the following: No adverse political changes would occur in the region. Q Economic conditions in the WBG would not worsen due to inflation, locally or worldwide. Civil strife in WBG would diminish and would not disrupt TITA nor adversely impact the fioancial viability of CDP-assisted projects. During the 33 month period ending in August 1992, none of these goal assumptions were realized for any sustained period of time. It is worth noting some of the events which took place during this time span that conspired to adversely affect pmgram accomplishments, especially on the agricultuml export marketing side. The intifada (uprising) began in Gaza in December 1988, with a major confrontation between the Israeli army and Palestinians in the Jabaliah refugee camp. The unrest spread quickly to the West Bank where riots, pmtests, demonstrations and commercial strikes were carried out. Stone throwing became a daily occumnce whereby the Israelis responded with inc& army presence in WBG. By 1989 the innyada was at its height. All the universities in the WBG were closed as were most all of the intermediate and secondary schools. Mid-1990 (about one year after the extension grant was signed) saw the attempted landing of a temrist boat off the shorn of Askelon (south of Tel Aviv) which brought on new and extremely tight security regulations and travel restrictions that continued unabated for months, and which were especially carried out in Gaza. In October of the same year, the killing of 17 Palestinians on the Temple Mount caused a major civil crisis with the occupying authorities. A sense of desperation prevailed as tighter mstrictions on movement were imposed, and the number of strikes increased measurably. A system of magnetic passes was then introduced by the Civil Administration (CIVAD) in Gaza for residents needing to travel to Israel for work. Travel between the West Bank and Gaza became very difficult. Towards the end of 1990 regional strife reached a fever pitch with Iraq's invasion of Kuwait and the outbreak of the war in mid-January 1991. The period leading up to the war was fraught with tension between Palestinians and the occupying forces, which manifested itself by extended curfews on villages and municipalities and increased Israeli army presence throughout the territories. Once the war began, the situation in the WBG deteriorated even further with most of the territories placed under curfew for extensive periods of time. Training and technical assistance efforts were suspended. After the war concluded in the spring of 1991, the CIVAD instituted a new system of passes for all Gaza and West Bank residents. Passes were issued by CIVAD for thm to four month periods. The pass system and the inability to obtain passes in rr timely manner severely limited CDP's deployment of WBG staff until the fall of 1991. Furthermore, it caused disruptions for all CDP Jerusalem-based training in as much as Palestinians from the territories could not travel freely to Jerusalem. In addition to curtailment of movement, the'events preceding the war, the war itself and its aftermath, had a devastating economic impact on Palestinian communities in WBG. Palestinian employment in Israel was curbed or totally cut off, diminishing or eliminating incomes for tens of thousands of families. Also during this period (winter and spring planting time in the West Bank) many farmers could not reach their fields to plant or cultivate. Exports during the winter of 1990-91 to Europe augured well for West Bank and Gaza farmers, but as hostilities broke out in mid-January, all exports from the West Bank ceased. The Beit Lahia Strawberry and Vegetable Cooperative in Gaza did manage to make several shipments of eggplants, tomatoes and strawberries, but suffered financial losses on each shipment. When the war ended in March, the export season was already over. Finally, the physical dislocation of hundreds of thousands of Palestinians from Kuwait, Saudi Arabia and other Gulf states caused an almost immediate cessation of vital remittances to WBG fa mi lie,^ from datives abroad.